Input Price Discrimination with Horizontal Shareholding

Horizontal partial shareholding, dual purpose concern, and mixed duopoly competition

“…Moreover, there exists partial shareholding between firm 1 and firm 2. For convenience, we denote the partial shareholding hold by other firm as λ (Li et al, 2015;Li & Shuai, 2021). We consider two scenarios:…”

“…Moreover, there exists partial shareholding between firm 1 and firm 2. For convenience, we denote the partial shareholding hold by other firm as λ (Li et al, 2015; Li & Shuai, 2021). We consider two scenarios: (i) Scenario D —firm 1 is acquiring firm while firm 2 is acquired firm; (ii) Scenario P —firm 2 is acquiring firm while firm 1 is acquired firm.…”

“…Leonardos et al (2021) study the strategic relationship between cross holding and cost-reduction technology licensing. Li and Shuai (2021) investigate the downstream firm's horizontal holding on upstream firm's pricing strategy. All these papers indicate the positive anticompetition effect of shareholding.…”

“…The previous papers have indicated that the firm's responsible concern may intensify the competition in product market because of higher output and lower selling price. In practice, firms also horizontally holds the rivals' stocks or shares to mitigate the production competition (Benndorf & Odenkirchen, 2021; Leonardos et al, 2021; Li & Shuai, 2021; Papadopoulos et al, 2019). Motivated by these two counter‐driving forces on production competition, we formulate a Cournot competition model including a dual purpose firm and a profit‐driven firm.…”

Cross Ownership, Loan Commitment, Managerial Delegation and the 'Prisoner’s Dilemma'

“…Note that on the one hand, in terms of cross ownership, some studies focus on the emergence of implicit collusion between managerial firms and examine the possibility of cross ownership resulting in collusion (Spagnolo, 2005;Gilo et al 2006), and others investigate the welfare effect of cross ownership under different ownership structure (Chen et al 2021;Hu et al 2021;Lestage, 2021;Li and Shuai, 2022;Alipranti et al 2022;Sun and Wang, 2022). On the other hand, the literature on strategic managerial delegation has grown significantly since the seminal contributions of Vickers (1985), Fershtman (1985), Fershtman andJudd (1987), andSklives (1987) (VFJS for shot), the outcome is that the sale delegation in Cournot market will lead to the "Prisoner's Dilemma" situation.…”